Contents
1 About De Beers 2 Where they operate 3 Vision & Values 5 Into the future 6 Industry supply vs. demand 7 Projected population 8 The issue being addressed 9 Proposal 10 SWOT Analysis 12 Other successes 14 What sets Brilliant Earth apart 15 Target market analysis 19 Competitors 21 Trend forecasting 22 Product & pricing 23 Promotion 25 Future implementations 27 References
About De Beers
De Beers is the world’s leading diamond company, that has a leading role in diamond exploration, mining, sorting, valuing, selling and marketing. De Beers was established in 1888 and is a member of the Anglo American plc group. De Beers has created one of the most respectably named companies world wide, they strive to pursue brilliance with the consideration of their customers, employees and suppliers. As an organization, their overall purpose is to turn diamond dreams into lasting reality. (De Beers Report to Society, 2015)
(De Beers Report to Society, 2015)
Vision &Values
PURSUING BRILLIANCE The y guide how w e deal with our cus tomers, our people, our suppliers and our contr actors. It is all par t of our pursuit of brilliance. De Beers is the bes t known diamond compan y in the world with a br and respect ed where v er diamonds are bought or sold. That br and is under pinned by our values, our vision and our s tr at egy for achie ving brilliance.
OUR PURPOSE We have five values – be passionate, pull together, build trust, show we care, and shape the future. They were developed by our employees in 2006 and remain the values we live by today. These values keep us focused on our purpose: to turn diamond dreams into lasting reality for the benefit of our customers and our stakeholders. It’s this purpose that drives us to achieve our vision of unlocking the value of our leadership position across the diamond pipeline to create a better diamond industry for all. How do we do that? By safely and sustainably making the most of every carat we mine and sell.
(De Beers Group, 2016)
5 CORE VALUES
5 CORE AREAS OF SUSTAINABILITY PERFORMANCE
Be passionate
Economics
Pull together
Ethics
Build trust
Employees
Show we care
Communities
Shape the future
Environment
New Values for De Beers Integrity and transaprency Guarantee Choice Innovation
INTO THE FUTURE
Looking in to the future, despite of De Beers’ unwavering efforts in reducing the environmental impacts of mined diamonds, we realised that we could do something more to contribute to a more environmentally concious, sustainable, and100% conflict free diamond trade. With that being said, De Beers is very excited to announce that it would like to introduce a new extension to its brand and expand its product portfolio, by investing in the production and retailing of lab created diamonds. Secondly, another factor influencing us to tap into this market is that demand for rough diamonds is going to exceed supply in the future (as seen in figure 1) and we want to be ready to provide an alternative for those customers who will not afford mined diamonds anymore. ‘demand for rough diamonds is going to exceed supply starting 2019, and because of the depletion of existing mines and relatively little new supply is coming online, this is where the lab diamond industry could pick up demand’. (Bain and Company) Lastly, our brand extension is also a way for us to appeal to our new target market; millenials. Given that millenials are the largest generation in history( Goldman sachs, 2016) (as seen in figure 2 ), and that they have distinctive preferences that diverge from previous generations ‘They tend to be more value conscious, more concerned with sustainability and ethical production, and often value unique and individual products versus items that are standardized and mass-produced’ (Daniels, J., 2016) We feel that lab diamonds will very much appeal to these type of consumers.
Indexed value
Industry Supply versus Demand (2005-2015)
Year
Source Rio Tinto Diamonds (2005) Source: http://pangeadiamondfields.com/diamond-sector.htm Figure 1. (Alabi, R. A., 2011)
Projected population (In millions)
Note: Millennials refers to the population ages 18 to 34 as of 2015. Source : Pew Research Center tabulations of U.S. Census Bureau population projections released December 2014 and 2015 population estimates Figure 2. (Caumont, A., 2016)
So what is this issue being addressed? Conflict diamonds have long been an issue in the diamond industry, ‘it’s been 15 years since the global effort to ban blood diamonds. But the industry is still tainted by conflict and misery’ (Baker, A., Kabanda, C., & Kalombo, F., 2015) So what are conflict diamonds? Conflict diamonds also known as blood diamonds is a term used for illegaly traded diamonds mined in war zones in order to fund ainvading army’s war efforts in Africa, where rebel forces were using diamonds in exchange for weapons and money. But it doesn’t just stop at that, the word ‘conflict’ also entails the contribution to extreme violence, worker exploitation, child labor and environmental devastation. The diamond industry has put in a lot of effort in order to tackle this issue like ‘The Kimberely Process’ initiative, companies becoming more sustainable and transparent with the issue of conflict diamonds arrising, laying out their sustainability performances and building new codes of ethics to ensure that their diamonds are conflict free, however despite the fact that companies can make an effort in becoming more sustainable, it is unachievable to become 100% sustainable with mined diamonds. Gemesis says that current diamond mining operations are “not in pace with increasing consumer consciousness”. (Stringer, L., 2014) People are looking for more sustainable, ethically grown products with minimal environmental impact and that is where lab created diamonds come into play.
Proposal
Creating a brand extension featuring lab created diamonds Providing customers a service in which they could customize their own jewelry Every piece of lab created diamond jewelry is accompanied with a certificate of origin to provide assurance that they are ethically grown with minimal environmental impact. Every piece of jewelry is laser inscribed with the certificate number and lab grown’ on the girdle of the diamond, further confirming our grown diamond’s origin. Showcasing the products online and selling them throughout all of De Beers’ retail stores
SWOT Analysis for Lab Created Diamonds
Strengths: Already a very well established and well known brand with a loyal following Very transparent Desirable good
Weaknesses: We sell a wide product line of mined diamonds, therefore it might overthrow our whole point of producing lab created diamonds Our loyal brand following cares for the exclusivity of mined diamonds, because they see ‘diamonds as a desirable symbol of status, glamour and romance’ (Falls, S., 2011) therefore they might not get on board with the lab created diamonds
Opportunities: Well crafted and unique designs, with excellent quality, increasing brand values while identifying a need for our products within the market place Gradually dominate the market, in order to have a well established presence when lab created diamonds start gaining popularity Since De Beers dominate a big portion of the diamond industry, they could make a bigger impact in popularizing lab created diamonds Encouraging more people to make conscious decisions we’re planning on targeting a new segment of the market aka. millennials
Threats: There are already existing businesses with similar products and sustainable values who have already established themselves in the market, and that might threaten the success of our brand extension
Other successes
Brilliant Earth is a jewelry brand impassioned with the idea of cultivating a more ethical, transparent, and sustainable jewelry industry. They are a brand fully dedicated to socially and environmentally responsible sourcing. At Brilliant Earth, there is no compromise between quality and conscience. (Brilliant Earth, 2016)
Brilliant Earth values
(Brilliant Earth, 2016)
What sets Brilliant Earth apart from other brands in the market? They do not just limit themselves to the Kimberely Process’s definition, which narrowly defines conflict diamonds as diamonds that finance rebel movements against recognized governments. (Brilliant Earth, 2016) • Their natural mines adhere to strict labor, trade, and environmental standards • They offer lab created and recycled diamonds’ eco friendly alternatives to natural diamonds • They are supported by SCS Global Services; which have identified their diamonds as fully traceable to their origins • They are involved in fair trade diamond model to improve the livelihoods of miners • They are apart of the U.S wildlife trafficking alliance; an initiative that protects all earth’s creatures from extinction • They use recycled gold and platinum to diminish the negative impacts of dirty gold, by reducing the demand for newly mined metals • They highly educate consumers on the issues affecting the jewelry industry and identifies ways to help
Target market: Millennials
Since millenials are very concious types of consumers and their buying habits are starting to shift towards more sustainable, ethical and value products, i feel that they would be an ideal target market for De Beers’ lab created diamond brand extension. “They tend to be more value conscious, more concerned with sustainability and ethical production, and often value unique and individual products versus items that are standardized and mass-produced.” (Daniels, J., 2016) Also millennials will become one of the largest generations in society, therefore De Beers needs to start thinking of a way to cater to this sector of society. “That’s the biggest generation in the U.S. and within a few years they’ll be the biggest consuming generation. They are also the generation getting married, and the bridal or kind of romantic engagement cachet is still the cornerstone of this industry.” (Daniels, J., 2016)
Consumer research study on millenials choosing lab created diamonds
Based on a consumer research study carried out by MVI Marketing Ltd. in 2016 (completed by 66% females and 33% males, ages 21- 35) i noticed that most millenials that participated in the survey are not really informed about lab created diamonds and that they are really curious on finding out more about what it is. (According to figure 3) Therefore i feel that De Beers with its strong presence in the diamond market could really have a big role in informing more people, and more specifically millenials.
(MVI Marketing Ltd., 2016)
Figure 3. (MVI Marketing Ltd., 2016)
• As shown n the pie chart lab created diamonds seem to really appeal to the millennial demographic Figure 4. (MVI Marketing Ltd., 2016)
Competitors for De Beers’ new brand extension of lab created diamonds Pure Grown Diamonds Vision: Provide a choice in diamonds that are beautiful, certified, sustainable, and guaranteed conflict-free. Mission: It is our mission to remain the leader in grown diamonds by providing the highest quality, value, innovation and choice using the latest technology in an environment of honesty, transparency and fairness with our customers, employees, vendors and society at large. (Pure Grown Diamonds, 2016) Competitive advantage: Only sell lab created diamonds, therefore they are a company that would have substantially less environmental impact compared to other companies that also carry mined diamonds. Also ‘All their colorless diamonds are type lla, which is the purest type found in nature’ (Pure Grown Diamonds, 2016)
Brilliant Earth Founded in 2005. Mission: At Brilliant Earth we strive to make jewelry as beautiful as it can be. We are passionate about cultivating a more ethical, transparent, and sustainable jewelry industry. (Brilliant Earth, 2016) Competitive advantage: Fair trade Donate 5% of profits toward education, environmental restoration, and economic development Recycle gold, platinum and diamonds
Mia Donna Founded in 2005. Mission: “Our mission is to create the highest quality and most beautiful, eco-friendly fine jewelry available, providing consumers an affordable diamond alternative while helping repair the lives and land damaged by the unethical conflict diamond industry. Our vision is to create a Greener Diamond culture by being the world leader in modern day, ethically produced fine jewelry.� (Anna-Mieke Anderson, 2016) Competitive advantage: Aside from lab created diamonds they offer a diamond hybrid; Constructed from a crystal core that has an infusion of enhanced lab created diamonds on the outer layer. According to Mia Donna, diamond hybrid possesses the most realistic, natural looking brilliance you will ever see from a diamond simulant Recycled gold and platinum Fully customizable ring design Offer a lifetime guarantee for all diamonds
Product trend forecasting
Softer blue, Pale pink & White diamonds
(WGSN, 2015)
Product and Pricing
Price range: Diamond rings $550 - $4,100 Diamond earrings $460 - $2,300 Diamond necklaces $340 - $2,300
Promotion for brand extension
Training for all store employees to have extensive knowledge on new brand extension Green boxes used made out of recycled materials for packaging Advertisements on store fronts and social media Representatives for the brand : Emma Watson and Olivia Wilde
• At the top of the list of celebrities promoting fair trade in the fashion industry. • A UN Women Goodwill Ambassador, promoting fair trade and ethical standards in fashion • In 2010 Watson launched her Feel Good Style site dedicated to sustainable fashion and natural beauty • Helped British fair trade brand People Tree create three collections consisting of organic and fair trade clothing • Worked with luxury designer Alberta Ferretti to produce an eco range called Pure Threads back in 2011 and says, “I will work for anyone for free if they’re prepared to make their clothing fair trade and organic. It’s really hard to get people interested.”
• Eco-activist • Launched a socially conscious e-commerce site called Conscious Co.; it pairs its brands with local organizations to create unique products • The face of H&M Conscious exclusive collection this year
Possible future implementation for De Beers Recycled gold and platinum In the jewelry indisutry, it is not just diamond mining that is unsustainable, there is also gold and metal mining. Dirty gold mining has a history of civil war, labor abuses, and environmental devastation. Metal mining, and gold mining in particular, is one of the most environmentally destructive types of mining. To name a few, gold and metal mining is associated with water pollution, poor safety, inhumane labor and rights violations. Therefore, looking into the future i feel that De Beers should seriously look into recycling their gold and metals.
Gold and metals could be reclaimed from....
Competitors like Mia Donna, and Brilliant Earth already implement these practices within their business, and materials they recylce are of identical quality to newly mined metals. So what can be done is ‘choosing recycled metals to decrease the global demand for newly mined gold. This will diminish the environmentally and socially destructive effects of dirty gold and other metal mining practices. Because precious metals can be recycled repeatedly with no degradation in quality, they are a naturally renewable resource.’ (Brilliant Earth, 2016)
References Alabi, R. A. (2011). Africa and the Global Financial Crisis: Impact on economic reform processes. Münster: LIT Verlag. Anna-Mieke Anderson, CEO & Founder. (n.d.). MiaDonna & Company® was established in 2005 in Portland, Oregon by former model and mother of two, Anna-Mieke Anderson. Retrieved November 12, 2016, from http://www.miadonna.com/t-our-story.aspx Baker, A., Kabanda, C., & Kalombo, F. (2015). Dirty Diamonds. Time, 186(9/10), 62-69. Brilliant Earth. (n.d.). Retrieved November 12, 2016, from http://www.brilliantearth.com/about-us/ Caumont, A. (2016). FT_16_04.25_generationsFeature. Retrieved November 13, 2016, from http://www.pewresearch.org/facttank/2016/04/25/millennials-overtake-baby-boomers/ft_16_04-25_generationsfeature/ Daniels, J. (2016). Diamonds aren’t a millennial’s best friend. Retrieved November 13, 2016, from http://www.cnbc.com/2016/06/16/ blame-millennials-diamond-jewelry-business-in-a-rough-spot.html De Beers Report to Society (2015). Retrieved October 9, 2016, from http://www.debeersgroup.com/content/dam/de-beers/corporate/documents/BuildingForever/Report to Society 2015.pdf De Beers Group. (2016). Retrieved October 09, 2016, from http://www.debeersgroup.com/en/index.html Education Library | FAQ. (n.d.). Retrieved November 12, 2016, from https://www.puregrowndiamonds.com/education/faqs/ Falls, S. (2011). Picturing Blood Diamonds. Critical Arts: A South-North Journal Of Cultural & Media Studies, 25(3), 441-466. doi:10.1080 /02560046.2011.615144 Jewellery Material Update A/W 15/16. (2015, February 25). Retrieved November 13, 2016, from https://0-www.wgsn.com.library.scad.edu/ content/board_viewer/#/57081/page/5 Millennials Infographic. (n.d.). Retrieved November 13, 2016, from http://www.goldmansachs.com/our-thinking/pages/millennials/ Millennials choosing lab created diamonds. (2016, May 26). Retrieved November 14, 2016, from http://www.goldandtime.org/pdf/MVI. pdf Stringer, L. (2014). Are man-made gems the key to a sustainable diamond trade? Retrieved November 12, 2016, from https://www. theguardian.com/sustainable-business/diamonds-conflict-mines-environment-jewelry THE GLOBAL DIAMOND INDUSTRY 2015 - Bain & Company. (n.d.). Retrieved November 6, 2016, from http://www.bain.com/Images/ FINAL bain_diamond_report_2015_01122015.pdf
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